Argentinians flocked to U.S. dollar-pegged stablecoins over the weekend after the abrupt resignation of the country's economy minister on Saturday.
Argentineans have been piling into crypto as a means to hedge against the country’s rising inflation and a continued fall of the Argentinean peso against the USD dollar.
In 2016, before inflation really took its toll, one USD was only able to buy around 14.72 Argentinean pesos. However, six years later, one USD is able to buy as many as 125.5 ARS. The extra premium on US-dollar pegged stablecoins is the result of a law passed on September 1, 2019, called Decree No. 609/2019, which has made it virtually impossible for Argentinians to exchange more than $200 in greenbacks per month at the official exchange rate.
It was imposed as a means to prevent the Argentinean peso from free-falling amid a struggling economy. In May, the Argentinean annual inflation rate accelerated for the fourth straight month, hitting 60.7%, according to Trading Economics.The South American nation has the sixth-highest adoption rate globally, with around 21% of Argentineans estimated to have used or owned crypto by 2021, according to Statista.
In addition to Bitcoin, Argentineans have been turning to stablecoins increasingly as a means of storing value in the United States dollar.
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